What You Need to Know About Commercial Real Estate

By Despite the popularity of remote work many entrepreneurs and small business owners

By Thomas Mensendiek

What You Need to Know

Despite the popularity of remote work many entrepreneurs and
small business owners still opt for an office environment. After all, an office
is synonymous with hard work and productivity.

Whether because of business growth or simply being tired of
navigating coffee shops, this may lead someone to research co-working spaces or
enlist Google to search, “how to find office space for small business” and “how
to rent office space”.

That said, there are several things to know about commercial
real estate before putting your name on the dotted line. In this post, we’ll
review some of the pertinent information to keep in mind.

Locating Office Space

Finding an office space can be daunting and exciting at the
same time for entrepreneurs and small business owners.

Before looking for small office space, there are a few
things to keep in mind. Firstly, assess your situation, as office space is not
cheap. Ask yourself, “Do I really need office space?” Perhaps a co-working
space is more suitable. If you come to realize that all you need is a few days
away from your home office or the coffee shop, your local library could be an
alternative.

The point – be sure you’re ready to rent office space.

Other factors to be mindful of are the amount of space
you’ll need, amenities you’ll need or want, and the geographical locations
you’re considering, which are just a few things that will impact your budget.

If you determine renting office space is right for your
business, there are several ways to search for and find potential locations,
including those specific to states/zip codes:

Use alternative online resources – Craigslist; local
community threads; forums; and newsletters

Other methods: word of mouth; local newspapers, mailers, and
guides; visible “for lease” signs in areas of interest

Enlist a trusted commercial real estate broker like Thomas
Mensendiek, offering years of knowledge and experience

Determining Rent

One of the most pertinent things to know about commercial
real estate is the average commercial rental rates or price per sq. ft. in your
desired area. Aside from other added expenses/fees, knowing how to calculate
office space rent is a must.

Commercial Rental Formula

As you’re researching how to rent office space, you may come
across monthly and yearly price quotes. Below you’ll find a scenario and
formulas to help you calculate both. Please keep in mind, the calculations
below will only result in base rent.

Once you calculate the base rent and factor in estimated
operating costs, you will have an idea of your monthly cost, along with gaging
the amount you’re willing to pay for office space.

If you need further assistance deciding what you should be
paying or leasing rates in specific areas, the best advice is to consult a
brokerage such as SF Office Spaces.

Renting & How To Set Up a Small Office Space

After researching, determining your budget and calculating a
monthly estimate, and finding the perfect location for your business, it’s time
to negotiate; depending on your comfortability, you can do this or you can hire
a brokerage to ensure you get the best deal.

In any case, be sure that you fully understand every clause
and term before signing. Also, be mindful of the various types of leases;
“As-Is clauses”; transfer/subletting limitations; termination without cause
clauses; the condition of the location; and construction build-out provisions.

After signing on the dotted line, the setup begins. The key
is to make your office as efficient and welcoming as possible. Below is a list
of standard items nearly every new office needs:

Computers

Copier/printer/office phone

File cabinets and storage

Fast internet/phone service

Office furniture

Office supplies (pens, copy paper)

Other considerations for designing an office space include:

Whiteboard/projector

Answering service

The type of floor plan (cubicles, workstations)

Lighting and colors used throughout the space

Dining supplies (microwave, coffee machine)

Leasing and setting up an office space is at minimum
laborious. The more planning and research you do upfront, the easier the
process. Although the aforementioned is not a conclusive composite regarding
things to know about commercial real estate, it’s a great place to start,
especially if you’re just beginning your office space journey.